Posted by Chuck on May 5, 2017
Credit Cards

Published on May 5th, 2017 | by Chuck

170

Chase Cancelling All Accounts of Recent Card Applicants who they Deem Risky

It always starts the same way: someone applies for a Chase credit card and is approved. Subsequently, they see their card isn’t working/activating, they are told the card has been closed by Chase. Soon after, they find out that all their cards have been closed out by Chase.

I’ve seen at least five recent data points with virtually this identical story (1, 2, 3, 4, 5, 6, 7, 8, 9 a friend). It seems Chase has a team review recent card applicants. This team works separately from the approval system; they look through recently approved cardmembers to see if any of them are ‘risky’ members. If they are deemed a risk, they shut down all of their Chase credit cards.

The following factors seem to be common among those shut down:

  • They had several new credit cards across various banks in a short timeframe.
  • They had numerous recent hard pulls showing on their credit report.

It does not seem to be MS related, just cards/inquiries related. In a lot of the cases, they had newish Chase cards as well (besides for the card they had just applied for).

Amex introduced a RAT team, well, maybe we should call Chase’s the BRAT team. Whatever.

brat

 

Silver Lining

Luckily, we can end on a positive note. Most of the time, it seems that Chase agreed to reopen their accounts upon review when they spoke to the lending department. I’ve seen multiple such reports.

Final Thoughts

The bottom line is that there’s a new animal in the room. Before applying for a Chase card, make sure you’re report is relatively clean. When applying for a Chase card, don’t do other applications the same day, not for other Chase cards and not for cards from other banks. And try applying with a relatively clean report if possible, i.e. you haven’t applied for anything in a few months.

Remember also that card issuers soft pull our credit reports all the time, and it’s hard to say anyone is entirely safe. But the BRAT team seems to be reviewing specifically those who recently got a new Chase card, so that’s where we need extra vigilance.

See our follow-up post Chase Account Freeze due to Financial Review for some more information in the Chase shut down process. We’ll also add this to the list of how to Spare your Credit Cards from Shutdown.



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Alex
Alex

Any idea how far ago they go and whether they look at recently denied applicants?

projectx
projectx

So… likely spelling the end of applying for WN Premier and WN Plus for the CP?

DSP
DSP

I wouldn’t go so far as to say that. If I read them all correctly, all of these DPs had more than 2 Chase cards in a short period of time. As long as you keep your Chase apps scarce leading up to and following the dual SW card app, I wouldn’t expect to have any issues.

YRK
YRK

What be considered new chase card? Approved CSP on April 6 inbranch.. Should i be worried?
Last credit application b4 that was way back in august 2016

Arthur
Arthur

You’re definitely fine.

YRK
YRK

Thanks.
Thats relief

HT
HT

Most likely a reaction on recent Q1 reports by several banks:
“…American consumers are holding $1 trillion in revolving credit, mostly in credit card debt. So how well is this segment of consumer debt holding up?

Synchrony Financial – GE’s spin-off that issues credit cards for Walmart and Amazon – disclosed on Friday that, despite assurances to the contrary just three months ago, net charge-off would rise to at least 5% this year. Its shares plunged 16% and are down 27% year-to-date.

Credit-card specialist Capital One disclosed in its Q1 earnings report last week that provisions for credit losses rose to $2 billion, with net charge-offs jumping 28% year-over-year to $1.5 billion.

Synchrony, Capital One, and Discover – a gauge of how well over-indebted consumers are managing to hang on – have together increased their Q1 provisions for bad loans by 36% year-over-year. So this is happening.

Other worries about consumer debt in the US are piling up. The $1.4 trillion in student loans are already in crisis, though the government backs them, and they cannot be charged off in bankruptcy. Mortgage debt is still hanging in there, given the surge in home prices that make defaults unlikely. But of the $1.1 trillion in auto loans, subprime loans packaged into asset backed securities are getting crushed by net charge-off rates that are worse than during the Financial Crisis.
http://wolfstreet.com/2017/05/01/are-american-debt-slaves-getting-in-trouble-again/

MSer
MSer

Irony is that churners and MSers ALWAYS pay their bills, often multiple times a month…

Superchurn
Superchurn

Its like the CC companies want financially irresponsible but also non-risky customers…customers who get deeply into debt but always pay on time.

I suspect churners cost them the most, because we don’t pay interest and take up an exorbitant amount of personnel resources with all the applications and recon calls 😀

Reminds me to be responsible and pay off my $7k CitiDC balance before the 0% is up

cm

No, the charge-offs is what costs them the most. That’s why on the grand scale of things they don’t worry about us churners all that much.

JJ
JJ

Its not just potential loss but its also suspected money laundering. Thats why they freak out with unusal payment and spend patterns.

Also, banks can lose money with MS.

Patrick
Patrick

Chase has the lowest bad loan rate of any issuer.

If they were doing it for this reason they’d look at utilization not opens/inqs.

Froide
Froide

Chase looks at both utilization and opens/inqs.

Chris
Chris

Interesting, because Citi and CapOne both just closed my accounts that were well over a year old and always paid off. My credit score is over 800 too.

Ell
Ell

I suspect that Citi and CapOne closed uour cards due to suspected MS.

Chris
Chris

Yea, they wouldn’t say why other than that the user agreement says they could stop doing business with me for any reason they wanted.

I’d love to know what the real reason was. Probably just the volume.

Justin
Justin

Theres another DP in a city specific FB page of this happening as well. Happened after they put 1k spend on a new Hyatt card

William Charles

Any link?

P
P

I only apply for a chase card once a year because they’ve always needed to be manually approved for some reason. My oldest credit card is also with chase. Luckily they have the 5/24 since the last two years that has made me unable to churn their cards.

AbelianGrape
AbelianGrape

Were any of the shut-down DPs for CPCs?

Dan
Dan

I haven’t seen any, personally. I’d think a client would be considered less risky if they have substantial funds parked at Chase.

Ken
Ken

Are these people with tons of Chase cards that are getting the ax?

MarcoPolo
MarcoPolo

They look at ALL recent credit card accounts. If you have recently acquired a lot of credit cards (hence a lot of available credit) you are considered a “risk”. They are worried that you will accumulated a tone of credit card and won’t be able to pay it back and the whole “bubble” will burst and everyone (including Chase) will drown.

Jordan
Jordan

It would be nice to know whether those people have Chase banking accounts.
Having a checking/saving should prevent you from being shut-down since it more or less indicate your ability of repayment.

chaseaholic
chaseaholic

though you may think of that intuitively sifting through the FT dp’s indicates a pretty clear trend in a lot of people with chase checking accounts being shut down

Jordan
Jordan

Under similar situation or because they deposited MO?

Mike
Mike

Only already depraved, truly deplorable dilettantes would do MO deposits at Chase. That’s just so wrong, like erecting a mammoth wind turbine farm next door to a bird sanctuary.

Gerald
Gerald

Lol!

Patrick
Patrick

I have a Chase account but I don’t deposit my payroll into it.

They have other means of estimating your income.

Vic
Vic

Chuck,

Have you seen any recent success in reinstating account? Most of the reports I’ve heard recently all failed. (I’ve heard 3 so far, all reinstatement requests were declined after review by supervisor)

chaseaholic
chaseaholic

guy on reddit recently had his accounts reopened. I actually thought this post was what he was referring to.

anyways it was somethign ilke 3 fresh cc w/ 1 chase opened in a month + 5/6k balances on multiple chase cards + a 6k then a 12k purchase on the latest chase cards -> shutdown

Vic
Vic

Thanks Chuck.
DP’s around me shows otherwise. I’ll e-mail you and Will my side of story after it settles down.

It is too specific and easily-recognized (by Chase) so I don’t wanna share it here now.

mortalwombat
mortalwombat

Did you apply for 2 cards the same day?

MarcoPolo
MarcoPolo

Happened to me about 10 years ago.
I called chase to lower credit limit on one of my chase cards and the “Credit Ninja” went berserk for some reason and started looking at my entire credit history. He not only closed all my credit cards but also DW’s.
I had 60,000 points which were forfeited. I complained to anyone/everyone on the planet after which they reinstated my account and I was able to cash out my points. But after few days they again closed them citing “soured business relationship” or something like that.
I was Chase-less for few years but we started dating again,got married and are living happily ever after 🙂 with three credit cards.

Jane
Jane

Curious, did Chase report the cards as ‘closed by issuer’ or something of that sort on the report? I heard that lowers your score and is seen as negative to future lenders.

I opened 3 personal and 4 business cards past two months, including two chase one of which has not arrived yet, and feel like I’m facing a shut down soon by a credit ninja.

MarcoPolo
MarcoPolo

@Jane
Yes Chase reported the cards are ‘closed by issuer’. Didn’t affect my credit score/report as I had Citi/BoA and Amex credit cards with low utilization.

Ryan
Ryan

Having the notation of closed by issuer doesn’t lower your credit score, but if you apply for something in the future and it goes to manual review it may raise questions by the credit analyst. Your FICO score doesn’t take into account *how* an account was closed, but the closure can affect it in other ways like raising your overall utilization because you lost available credit.

MarcoPolo
MarcoPolo

^^ This is the reason I am very careful of “churning” credit cards and don’t usually apply for a credit card unless it has at least $500 (or equivalent) in sign up bonuses.
This keeps the number of credit cards low and rewards high 🙂

Superchurn
Superchurn

I usually wait for at least $500 too…I try to put ALL my spend on bonus offers, and go for high spend requirement offers, so I tend to value 1 HP = $500 or more

Frito Pendejo
Frito Pendejo

Any DPs for people who are just starting out and getting only chase cards until 5/24? My wife has CSP, CSR, Ink+, and hoping to get InkPreferred and then two more Chase cards to wrap it up. Now it sounds like we should consider spending all UR down before applying for each card…

eclipsor
eclipsor

I’m terrified. I got 4 new Chase cards over the past 60 days along with 2 other news cards on the same days. I’ve been going super slow with purchases and avoiding making large ones at once. Been with chase for over 4 years and on a checking account with a corporate employee though

eclipsor
eclipsor

was hoping to get preapproved for the CSP in the future and the IHG later in the year but now I’m a bit paranoid

Ann
Ann

“on a checking account with a corporate employee”

As in you’re married (or whatever) to someone who works for Chase? I wonder if they go easier on their employees or not. Is he or she a cardholder on all your Chase credit cards too?

eclipsor
eclipsor

sister is an employee and we have a joint family checking. not sure how they see it, but everytime they pull up my account at the branch they ask me if I’m an employee

GPO
GPO

Now, I’m worried. I chasing the Freedom for sometime and I’m very close to pass the 5/24, just waiting to get the card and them apply to 2 other cards (Aliant and BofA Better Balance) and make a PC from Double Cash to Citi Dividends. So, besides, hold a long time before apply to a new Chase card I have to hold after be approved (being optimistic) to avoid lost the card. Also seems unfair as most of the people know they combine inquiries made on the same day, but, you are in risk if you open more than one card.

sdsearch
sdsearch

You can’t “wait to” get one card and “then” apply for the BofA Better Balance, because the BofA Better Balance about to be discontinued for new applications at the end of May:

https://www.doctorofcredit.com/bofa-discontinue-bbr-replace-slate-esque-card/

GPO
GPO

You were right… I applied just 2/3 days before they remove the card from BofA website. Tried Chase again, but, it was denied because they annoying 5/24 rule… with a AMEX closed account.

I’m not a market specialist, but, I really can’t understand this rule. I had another BofA credit card 18K limit, I’m assuming if I’m not a good customer, BofA would not approve another card with 18K limit, while Chase instead, wan’t to keep me away from their cards.

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